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Veterans Day prompts reminder of military tax credit

Filing time for 2010 income taxes is still months away, but on Veterans Day, the Minnesota Department of Revenue reminds taxpayers about an important tax benefit for members of the military.

"We thank all members of the military for their hard work and service this Veteran's Day. Their dedication and sacrifice is an inspiration," said Revenue Commissioner Ward Einess. "With the recently doubled military tax credit, we want to make sure all veterans receive the benefits they deserve."

The Credit for Military Service in a Combat Zone is available to members of the military who served in a designated combat zone or hazardous duty area. For service in 2007 and 2008, the credit is a refund equal to $59 for each month (or partial month) of service in one of the designated areas. The credit is $120 for each month served beginning January 1, 2009. If veterans have not previously claimed their credits, they can still file to receive the credit for time served in 2007, 2008 and 2009.

To claim the credit, veterans should complete and file Form M99, Credit for Military Service in a Combat Zone, for the year(s) in which they served. The department will accept the 2010 Form M99 beginning January 1, 2011 for combat zone service performed in 2010.

The Form M99 is filed separately from Form M1, Minnesota Individual Income Tax Return. Credits can be claimed for service in 2007 until October 15, 2011.

Eligibility requirements

Service members are eligible to receive a credit for military time served in a combat zone if:

--They served in a combat zone or qualified hazardous duty area anytime on or after January 1, 2007;

--The pay they received qualifies to be excluded as combat pay from federal gross income under Internal Revenue Code Section 112; and

--Their home of record during months of service was Minnesota.

The Revenue Department has been participating in the state's reintegration training program for soldiers returning from deployment. The training is coordinated by the Minnesota Army National Guard, and the Department of Revenue provides staff members to help service members complete the necessary forms for the military credit and assist with other tax matters.

To date, more than 20,500 service members have filed for refunds totaling more than $9,775,000.

For more information about the tax credit, including required documentation, forms and instructions, visit or call 651-296-3781 or 1-800-652-9094.